Philip is a resident of the great state of New York, but has inspired and motivated fellow Roger students through online forums and social media platforms across the globe. Philip has already passed FAR, AUD, and is now gearing up for BEC.
Hello! Im writing my blog after completing the Decision Making Module in Rogers BEC course. To be very honest (as I think I have been thru out my blogs), cost accounting was my number one accounting weakness in college. I didnt like it and I didnt get it. Life has a funny way of bringing everything full circle. I oversee the accounting at an Army installation, and yes Im in charge of cost management.
But in reality, there are several concepts that we use regularly in our discussions with the Brigades. For instance, we recently had a requisition for the purchase of plasma cutter so the engineers could build their own parts vice ordering them thru the Army supply system. Im all about technology, but Im also about reality, which is driven by costs.
I responded to the request with several questions. Have you considered storage for the raw materials and finished goods? Do we need to build new facilities? What about utilities as they will increase with each machining hour? Have you considered the costs of labor for a soldier or civilian to sit at this machine while it produces parts, or the opportunity cost for using borrowed manpower to man the machine? Suddenly, these costs were adding up faster than the engineer could think. It turned out that a washer that normally cost pennies would now cost over a dollar with the new tool vice ordering thru the system.
While Roger jokes that this was not his favorite in school, and I definitely had a strange professor teaching it as well, a basic understanding of DM, DL and OH not only helps one allocate costs, but make smarter costing decisions for acquisition. In this case, we were able to minimize costs to the taxpayer with a basic understanding of the classifications and behaviors of costs.